Caterpillar loses social index as Israel uses bulldozers in Palestine

Earth-moving equipment maker Caterpillar (NYSE:CAT) has been removed from the socially responsible share index, managed by US investment firm MSCI, over Israeli use of its bulldozers for demolition in Palestine.

In a statement, the MSC said practices were one of the "key factors" in its decision to downgrade Caterpillar, although it also cited employee safety concerns, environmental issues and the closing of EMC's locomotive plant in Ontario, Canada, last February.

The decision has already spurred TIAA-CREF, a US mutual fund giant, to withdraw $72 million in Caterpillar shares from its "Social Choice" Fund, which tracks one of MSCI's indexes.